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Creditors of South Africa's African Bank agree to restructuring
A man walks past a branch of African Bank in Cape Town, August 8, 2014. PHOTO BY REUTERS/Mike Hutchings
28/05/2015
JOHANNESBURG (Reuters) - South Africa's African Bank has received the go-ahead from creditors to split its good loans from its toxic assets, the company's curator said on Thursday.
The central bank rescued the lender in August and appointed a curator to turn around the business after heavy losses from granting unsecured loans to low-income borrowers.
The bail-in guaranteed deposits but imposed a haircut on bondholders.
Both senior unsecured debt holders and subordinated debt holders have now agreed in principle to the bank's restructuring proposal, African Bank's curator Tom Winterboer said.
Senior unsecured debt holders will have 90 percent of their claims exchanged for new unsecured notes in the lender's "good bank" and the rest as residual securities in African Bank, Winterboer said.
Subordinated creditors can have their claims, totalling 4.4 billion rand ($365.4 million), converted into equity or exchange it for a combination of notes in the good bank and subordinated residual debt instruments.
(Reporting by TJ Strydom; Editing by David Goodman)
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